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The CEO of JP Morgan Chase — a major financial institution — has made some, shall we say, controversial remarks on bitcoin. Primarily because he’s demonstrated in several sentences he knows very little about it.

“It’s a terrible store of value. It could be replicated over and over,” Jamie Dimon said to CNBC. “It doesn’t have the standing of a government.”

We normally try to stand objectively. But this is complete silliness. Mr. Dimon, do understand bitcoin does not simply get “replicated over and over”. On the contrary, that’s what happens with the United States dollar. The fact is doesn’t have the standing of a government is, well, one of the points.

“And honestly, a lot of it – what I’ve read from you guys – a lot of it is being used for illicit purposes. And people who will get upset with it is governments,” he said, seemingly oblivious to the fact the same exact thing takes place on a larger scale with cash-money.

Dimon continued to bring up the point that banks put a lot of work into anti-money laundering and know-your-customer efforts, stating it’s “almost impossible” to do this with bitcoin.

Does not compute. Mr. Dimon, this does not compute! One would argue bitcoin is more traceable than cash is, with transactions made publicly viewable on the block chain. Smart criminals keep their money out of banks and do what they can to keep their loot out of view. (via RT)

Super User → administrator Nuno Menezes is a Bitcoin Entrepreneur and a crypto currency’s enthusiast strongly supporting the Bitcoin Portuguese Community. He is an Anthropologist and a Writer and his current field of work is virtual currencies.Complementing his Social Sciences Master degree with a Professional background in telecommunications along some experience in Computer Science, he intends to bring knowledge and understanding about the impact of crypto currencies in society. Updated

How ironic, since JP Morgan tried and failed 175 times in December to patent a clone of Bitcoin.

Burton

Bailed out. That’s what I think.

Honestly it’s laughable that any banker would call Bitcoin a horrible store of value. Not that they have any vested interest in the public perception of the dollar, right? But if people could see how badly the dollar is being devalued by the fed and how insulting the banks’ returns on your investment are relative to that devaluation, they’d be laughing this guy out of the room.

http://spottedmarley.com Spotted Marley

Organized crime bosses are always so ignorant when they open their mouths. I’m curious, did Jamie Dimon evert use the term ‘bada-bing’ anywhere in his comments?

http://bitcoinowl.com Ivan Raszl @ Bitcoin Owl

When the CEO of JP Morgan Chase feels the need to publicly trash Bitcoin we can be sure Bitcoin is on to something.

But let’s take a look at his argument in detail.

In short he says Bitcoin will collapse not because the technology is bad or because it doesn’t have benefits over old forms of money, but because it allows criminal activity and thus governments will ban it.

Three problems with this:

1. The growth in acceptance of Bitcoin is coming from legal corporations, like virgin, overstock.com and tigerdirect.com. The illegal sites are being taken down like Silk Road. So his preposition is incorrect to begin with.

2. Regular cash is way better to fund criminal activities than Bitcoin, because it doesn’t have an open public ledger like Bitcoin does. If Bitcoin has to go because of crime, cash has to go for sure as well, because it funds 10,000x more illegal activities. But people and governments tolerate the dark side of cash in order to be able to take advantage of its utility. There is no reason why they wouldn’t do the same with Bitcoin. Same applies to credit cards that have a big criminal problem. Same with large banks and other financial institutions that have huge fraud cases.

Clearly it is nonsensical to shut down something because it has an element of criminal activity in it. The FBI said they are ok with Bitcoin and they successfully demonstrated the takedown of Silk Road. I bet they wish all criminal activity was on Bitcoin so they could track it nicely with data mining on the public blockchain.

3. There is no effective way to ban Bitcoin just like it is not possible to shut down the illegal file sharing of copyrighted materials. No politician will attempt a ban Bitcoin as it would be a political suicide, first because it can’t be effectively enforced and second because he would be seen as a North Korean dictator who fears losing control over monetary influence.

Even if one government did decide to take the risk and make Bitcoin illegal, it would remain legal in other countries. Bitcoin would become a digital martyr and the symbol of freedom. Bitcoin would not die, it would only take a dip in price just to recover a few weeks later, just like when China attempted to regulate against Bitcoin.

In short Jamie Dimon’s argument doesn’t stand ground. Bitcoin may indeed die, but not because of the reasons he mentioned.